UPDATED, Oct. 22, 2025: This story has been updated with a comment from the Department of Health and Human Services.
Before Congress passed the “Big, Beautiful Bill,” hospital CEOs, rural health groups and patient advocates descended on Capitol Hill to warn of one of many potentially devastating effects of the legislation:
At the Democrats’ request, researchers produced a list of hospitals that would be at risk of financial distress resulting in closure or reduction in services.
In response to the alarm, lawmakers tacked on the Rural Health Transformation Program fund, $50 billion to be divided among states, to ease concerns.
Sen. Shelley Moore Capito, R-W.Va, told WOWK 13 News in early July, shortly after the law passed, that the fund would offset harms to health care providers.
“We need the access, we need the availability and need the affordability (of) our rural hospitals and the good care that they deliver,” she said.
But when Congress passed the law, with the support of all members of West Virginia’s delegation, the law still made the largest Medicaid cuts in history.
KFF, a health analysis and news nonprofit, predicts that tens of thousands of West Virginians will lose Medicaid coverage. Nearly one-third of the state is covered by the program.
And the National Rural Health Association and researchers say that despite the additional funding, providers like hospitals are still at risk of closures or reduction in services.
Rural health experts, such as Alexa McKinley Abel, director of government affairs & policy for the association, agree that the designated purposes of the Rural Health Transformation Program fund are commendable.
Some of those include efficiency, prevention, innovation and workforce recruitment.
“I still think that’s not going to raise people out of poverty, so that they don’t need Medicaid anymore,” McKinley Abel said.
William C. Maloney, a spokesperson for the Department of Health and Human Services, which runs the program, said that “Congress has made a decisive investment in rural health care” and that the funds “will be directed to support hospitals and providers in West Virginia’s underserved rural communities, where the need is greatest.”
Michael Meit, director of the Center for Rural Health and Research at East Tennessee State University, noted that members of Congress said the fund would help health care providers facing Medicaid revenue losses.
But he added that federal health officials have now added a provision that limits states to spending no more than 15% of funding on payments to health care providers.
And, despite the name of the Rural Health Transformation Program fund, there’s no requirement that the money go exclusively to rural health care.
Meit, who also studies addiction in Appalachia, expects that health care providers will close, and those most at-risk, due to their heavy reliance on Medicaid, include addiction treatment centers.
The bill cuts nearly $1 trillion nationwide from Medicaid over 10 years.
“There are a lot of reasons the fund won’t stop the bleeding,” Meit said.
Gov. Patrick Morrisey and other state officials have been working on an application to send to federal officials to secure the state’s portion of the $50 billion fund.
Each state will receive at least $100 million a year for five years. Another $100 million is available each year based on the quality of applications.
“It’s fake news to be trying to scare people with the dollar amounts that are out there when you know you have a major policy that’s going to intervene and it’s working to get people better,” Morrisey said during a recent press conference.
He said there are plans to use the fund to leverage private resources and on workforce issues, saying that commercial insurance plans, like those employers can provide, are a better option than Medicaid.
“We’d like more people to be in commercial plans than we would for Medicaid and obviously there are changes,” he said. “We all acknowledge that there’ll be changes in Medicaid.”
He also said state officials plan to use the fund for disease prevention and to target chronic disease.
“People get better and they don’t have to go into the hospital,” he said.
But West Virginia already has the highest rate of disability in the country. Some disabilities are lifelong, and they require specialized care.
The state also has a high number of people already diagnosed with long-term illness who need hospital and long-term care now.
Adam Searing, research professor at the Georgetown University Center for Children and Families, noted regardless of the rural health fund, some of those people will lose Medicaid soon.
And if a person loses Medicaid and shows up with a broken leg at an emergency room, the hospital has to swallow the cost.
The rural health fund doesn’t change that.
Searing noted that the Medicaid cuts are staggered over time and will mostly be felt after the 2026 midterm elections.
But adding the fund to the legislation was politically expedient.
“They actually called it the hospital fund,” he said. “It was like an acknowledgement that we know that all these Medicaid cuts are going to hurt our rural hospitals.”
Searing also said the fund’s purposes are smart ideas.
But, he added, that doesn’t negate the nonpartisan Congressional Budget Office’s finding that the Medicaid cuts would result in 10 million people nationwide losing coverage.
“There’s always somebody in health care who says if we do this reform, we’re going to save so much money, and it’s going to solve all our problems, and everybody’s going to be happy,” he said. “It never works. There is no magic bullet in healthcare.”